Personal Exemption amounts for 2008

You may claim both a Standard Deduction and the Personal Exemption for yourself. A Personal Exemption may be taken for the individual taxpayer, the taxpayer’s spouse, and the taxpayer’s child or other dependents. The personal exemption is allowed in the form of a deduction against the taxpayer’s income in the computation to arrive at the taxable income amount against which the tax rates are applied to compute the income tax. The only reason you would not be able to claim a personal exemption is if someone else could claim you as a dependent.

The Personal Exemption amount for 2008 is $3,500 and begins to be phased out if AGI exceeds $239,950 for 2008 joint tax returns and $159,950 for 2008 single tax returns. Each tax exemption is reduced by 2% for each $2,500 by which your AGI exceeds the threshold amount until the benefit of all tax exemptions is eliminated on your tax return. Tax exemptions are completely phased out for single tax return filers with an AGI of more than $282,450 in 2008 and joint tax return filers with AGI of more than $362,450 in 2008.